The moves, plus money spent to settle vesting restricted stock units, will use about $45 billion of Apple's nearly $100 billion in cash and securities, the company said on Monday. Apple's shares rose 2 percent in premarket.

The iPad, iPhone, iPod and Mac personal computer maker plans to initiate the quarterly dividend in the fourth quarter of fiscal 2012, which begins on July 1, and to begin the stock repurchase program in fiscal 2013, which starts on September 30.

COMMENTARY:

PETER KENNY, MANAGING DIRECTOR AT KNIGHT CAPITAL IN JERSEY CITY, NEW JERSEY

"That will be very supportive of not just Apple, which the market has been anticipating, but the supply chain - the legendary Apple supply chain. As a result, you are going to see tech - not just large cap, but smaller cap tech also participate in the move.

"It's a good story, the market was kind of expecting that - people were questioning what Apple could do with the money other than earn nothing.

"This is certainly a theme that has been widely been used by large cap tech to support not only pricing but also to support earnings, because in some respects putting your money back into the company, effectively taking shares out of the market by corporate repurchase has a very direct and very positive impact on pricing.

"That is very, very good for the stock, it's very good for the market, it's great for the sector and it's very, very good for the supply chain."

JOHN JACKSON, ANALYST AT CCS INSIGHT IN BOSTON

"This is consistent with what we, and I think most, expected them to do, which is to address shareholder concerns around the huge cash stockpile while retaining enough of a reserve to keep a wide range of strategic options on the table.

"This, plus the buyback should continue to bolster the soaring share price."

JOHN STRAND, CHIEF EXECUTIVE OF STRAND CONSULT IN COPENHAGEN "Apple is an overcapitalized company and it's probably better to have the cash in the shareholders' pockets then in Apple's pockets."

COLIN GILLIS, ANALYST AT BCG PARTNERS

"This is $45 billion in three years out of $100 billion now. It's a small percentage of the pile."

"For a lot of people who own this stock some dividend is better than no dividend."

"The stock has run on things that are not really major surprises. It's not irrational there's some pullback."

WILLIAM LEFKOWITZ, CHIEF OPTIONS STRATEGIST AT VFINANCE INVESTMENTS IN NEW YORK

"I would say it was definitely expected, a lot of mutual funds that say they're buying dividend companies had Apple in them - that shouldn't be but I guess it was that obvious that after Tim Cook spoke last time that this was the case.

"Even though it's a nice dividend - and buying back shares - sometimes companies or individual investors will just sell on the news. I think it's good news and that's what people wanted. There are investors who would not buy it until it paid a dividend so it opens a brand new door for them.

"The weekly options - on Friday it was just wild what's going on. I don't know what they could have said over the weekend to kill the company but on Friday you could have - the (weekly) $540s for almost $2. In five days it had to go down $45 for the guys to buy that.

"Last Thursday it was up $20, once it goes up $15-$20 then a volatility index becomes a lot richer. There are a couple of reasons why volatility should continue: they make everything they do like a major event and Apple also does a lot of that themselves. They could have just said in this morning we're going to do a dividend, but no, they're doing a conference call too, so they know how to excite Wall Street too."

STEPHEN TURNER, ANALYST AT HILLIARD LYONS

"While the size of Apple's dividend may be less than anticipated by some analysts, we are encouraged by management and the board's conservative position. We are in favor of starting with a dividend that we anticipate growing over time.

"We like that the dividend and stock buybacks can be done using the U.S. cash balance which would not raise the company's tax rate.

"The $10 billion dividend payout in its first year will make Apple one of the largest dividend payers."

(Reporting by Chuck Mikolajczakl, David Gaffen, Sinead Carew and Nicola Leske in New York and Tarmo Virki in Helsinki; Compiled by Tiffany Wu)

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